New York governor urges overhaul of state pension system
NEW YORK, June 3 (Reuters) - New York State Governor David Paterson on Wednesday urged lawmakers to approve changes to the public pension system that would save the state and local governments at least $48 billion in the next thirty years.
Paterson said he has vetoed a bill, extended since 1981, that would give new police officers and firefighters the same benefits as current employees.
"We need to change Albany's culture of 'business as usual.' Nothing says 'business as usual' like a temporary fix that lasts 28 years," the governor said in a statement.
Paterson is proposing an overhaul of the system that would create a less costly tier of pension benefits for new city employees.
The new legislation would establish a minimum retirement age of 50 and increase the minimum years of service required for individuals to collect a pension to 25 from 20.
"My proposal addresses the core problems with the pension system in a way that eases the crushing burden of New York's high property taxes," he said.
Paterson's proposal comes a week after State Comptroller Thomas DiNapoli said the New York State pension fund lost 26 percent of its value in the fiscal year ended March 31, hurt by the weak performance of major U.S. stock indexes.
DiNapoli said the pension's slide may mean higher contribution rates for local governments, beginning in 2011. For more, see [ID:nN29417976].
That drew criticism from Paterson who argued that workers trying to make ends meet in the recession can not afford higher contributions.
The Citizens Budget Commission, a non-partisan fiscal watchdog, welcomed Paterson's stand on pension reform.
"Public employee pension costs are skyrocketing; investments are down significantly; state employees already receive very generous pension benefits, and taxpayers -- many of whom are struggling to stay employed -- cannot afford to make those benefits even more generous now," the commission said in a statement on Wednesday.
New York City Mayor Michael Bloomberg agreed, and said the governor's proposal would save the city $200 million in 2010 and $7 billion in the next 20 years.
Bloomberg on Tuesday reached a tentative agreement with labor leaders that will help lower the city's health care costs.
The mayor and the municipal labor committee agreed on a set of changes to health benefits for city workers.
The agreement, which transfers more of the costs of health care to workers, is expected to save the city $200 million in fiscal 2010 and 2011, and $150 million in recurring savings for every year after that, he said in a statement.
(Reporting by Ciara Linnane)
